If the Tories lose the next election, this is why

George Osborne took a wrecking ball to Iain Duncan Smith’s welfare reforms (Getty)

It seems another age but there was a time when the commentariat hailed George Osborne as a political genius. That was in the early years of the Coalition government of 2010, but after some ham-fisted budgets and an ill-conceived EU referendum campaign (Osborne was the mastermind of the Remain effort) opinions have been revised drastically downward. Unfortunately it may be that Osborne’s worst legacy is only now slouching into full view. For it was Osborne who torpedoed the chance that Universal Credit – a decent-minded proposal to better the lot of the worst off – would succeed.

Universal Credit (UC) was the brainchild of Iain Duncan Smith, who experienced a light bulb moment back in the mid Noughties when he educated himself about the reality of the problems facing the poor. He identified what he termed the “benefits trap” whereby people had their money docked if they began to earn through work.

Duncan Smith, the first, and so far only, Catholic leader of the Conservative Party, decided that the benefits system should be redesigned in such a way that poor people would be tempted back into work. They would be allowed to do some paid work without suffering any withdrawal of their benefits. The great prize, as IDS saw it, was that people trapped in idleness, living on state handouts, could be coaxed back into productive labour.

As part of this humane and practical re-imagining of the system (which David Cameron broadly supported) Duncan Smith decided that the plethora of benefits (housing support, tax credits, social security etc) should be amalgamated into one consolidated benefit to be called Universal Credit. It would, he claimed, be simpler to understand and administer.

IDS did not pretend the new system would save money. In fact, initially it would cost more – but the long-term prize of fewer people consigned to everlasting state dependency would, he thought, eventually save money as well as delivering inestimable personal gains in terms of self-worth and dignity to individuals.

So much for the vision. Enter, stage right, Osborne, Gradgrind calculator in hand. In his post-election summer budget of 2015, and in the name of austerity, the then Chancellor took a wrecking ball to the carefully constructed edifice of UC. Whereas the original concept would have allowed a single person to earn £111 a month without loss of benefit, Osborne reduced that figure to zero. for a lone parent, the rate was to be reduced from £734 to £397.

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